Asian, European and Latin American fleets have devastated fish stocks in the southern Pacific, once among the world’s richest waters.

Since 2006, jack mackerel stocks have declined by nearly two-thirds. The oily fish is a staple in Africa, but people elsewhere are unaware that it is in their forkfuls of farmed salmon. Jack mackerel is a vital component of fishmeal for aquaculture.

National interests and geopolitical rivalry have blocked efforts since 2006 to ratify a regional fisheries management organization that can impose binding regulations to rescue jack mackerel from further collapse.

In Chile, a handful of companies controlled by wealthy families own rights to 87 percent of the jack mackerel catch; with government backing, they have secured unrealistically high quotas — beyond what scientists say are essential to save the stock.

In Peru, the world’s second largest fishing nation, widespread cheating at fishmeal plants allows companies to overfish and evade taxes. At least 630,000 tons of anchoveta – worth nearly $200 million as fishmeal – “vanished” over two and a half years.

January 26, 2012

Vessels that catch small pelagic fish like jack mackerel roam the oceans in search of fish. Here we follow the Lafayette as it traverses from the South Pacific to West Africa and Northern Europe in 2010 and 2011. Click and drag to rotate the Earth below, and see the ship's path traced in red.

Chilean jack mackerel is fished along a 4,100-mile coastline west of Chile and Peru, to about 120 degrees longitude, halfway to New Zealand. The jack mackerel roams widely in open waters, eating plankton and small organisms, and is food for bigger fish.

January 26, 2012

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TALCAHUANO, Chile — Eric Pineda peered deep into the Achernar’s hold at a measly 10 tons of jack mackerel after four days in waters once so rich they filled the 57-foot boat in a few hours.

The dock agent, like everyone in this old port south of Santiago, grew up with the bony, bronze-hued fish they call jurel, which roams in schools in the southern Pacific.

“It’s going fast,” Pineda said. “We’ve got to fish harder before it’s all gone.” Asked what he would leave to his son, he shrugged: “He’ll have to find something else.”

But what else is there to find?

Jack mackerel, rich in oily protein, is manna to a hungry planet, a staple in Africa. Elsewhere, people eat it unaware; much of it is reduced to feed for aquaculture and pigs. It can take more than 5 kilos of jack mackerel to raise a kilo of farmed salmon.

Yet stocks have dropped from an estimated 30 million metric tons to less than 3 million in two decades. The world’s largest trawlers, after depleting other oceans, now head south toward the edge of Antarctica to compete for what is left.

Its purpose was to protect fish, particularly jack mackerel. But it took almost four years for 14 countries to adopt 45 articles aimed at doing that. So far, only six countries have ratified the agreement.

Meantime, industrial fleets bound only by voluntary restraints compete in what amounts to a free-for-all in no man’s water at the bottom of the world.

One newcomer was at the time the biggest fishing vessel afloat, the 14,000-ton Atlantic Dawn, built for Irish owners. Parlevliet & Van der Plas of the Netherlands bought it, renaming it the Annelies Ilena. Such “super trawlers” chase jack mackerel with nets that measure up to 25 meters (82 feet) by 80 meters (262 feet) at the opening. When they are hauled in, fish are sucked into the hold by suction tubes, like giant vacuum cleaners.

Gerard van Balsfoort, president of the Dutch-based Pelagic Freezer-Trawler Association (PFA), which represents nine companies and 25 European Union-flagged vessels, confirmed the obvious: the Dutch, like others, went to mark out territory.

“It was one of the few areas where still you could get free entry,” van Balsfoort said. “It looked as though too many vessels would head south, but there was no choice … if you were too late in your decision to go there, they could have closed the gate.”

The mackerel rush also attracted the leading commercial player, the Hong Kong-based Pacific Andes International Holdings: PacAndes.

The company spent $100 million in 2008 to rebuild a 750-foot, 50,000-ton oil tanker into a floating factory called the Lafayette.

The Russian-flagged Lafayette, longer than two football fields, sucks fish from attendant trawlers with a giant hose and freezes them in blocks. Refrigerated vessels — reefers — carry these to distant ports.

The Lafayette alone has the technical capacity to process 547,000 metric tons a year, if it operated every day.

In September 2011, SPRFMO scientists concluded that an annual catch beyond 520,000 metric tons could further deplete jack mackerel stocks.

Cristian Canales of Chile’s fisheries research center, Instituto de Fomento Pesquero (Ifop), said a safer limit would be 250,000 metric tons. Some dissenting experts say the only way to restore the fishery is to impose a total ban for five years.

Subsidized over-fishing

Trachurus murphyi, Chilean jack mackerel, are fished west of Chile and Peru, along a 4,100-mile coastline, to about 120 degrees longitude, halfway to New Zealand.

They are known as small pelagics, vital to larger species. They range widely in open waters, eating plankton and small organisms, and are food for bigger fish.

The U.N. Food and Agriculture Organization says that global fishing fleets “are 2.5 times larger than needed.” That estimate was based on a 1998 report; since then, fleets have expanded. If unregulated, they can quickly devastate a fishery.

Much of that overcapacity has been driven by government subsidies, particularly in Europe and Asia, experts say.

A landmark report by Rashid Sumaila, along with the oceanographer Pauly and others at the University of British Columbia, estimated total global subsidies in 2003 — the latest available data — at $25 billion to $29 billion dollars.

Between 15 and 30 percent of subsidies paid for fuel to allow ships to range widely, it said. Another 60 percent went to increase size and upgrade equipment.

The study calculated China’s subsidies at $4.14 billion and Russia’s at $1.48 billion.

A report by the environmental group Greenpeace released in December 2011 looked hard at PFA, the Dutch-based association that represents the Annelies Ilena. It found the group received fuel tax exemptions of between €20.9 million and €78.2 million from 2006 to 2011.

The report, produced by an independent consultant for Greenpeace, said that by a conservative calculation PFA’s average yearly profit of around €55 million would be €7 million without taxpayer support. At the other extreme, it said, PFA would have lost €50.3 million.

PFA’s Helen Mary, which began fishing in the South Pacific in 2007, received €6.4 million in subsidies from 1994 to 2006, more than any other EU fishing vessel, according to European Commission data on the website fishsubsidy.org.

Van Balsfoort, the PFA president, did not dispute the subsidy numbers but said fuel tax exemptions are routine in the fishing industry. He said the Helen Mary and a sister ship were decrepit Eastern German trawlers, rebuilt with Germany’s encouragement after reunification.

Under international practice, vessels can fish freely in areas not governed by ratified accords. Still, the European Union requires ships of member states to accept SPRFMO interim measures as legally binding. And EU countries must divide up a collective annual quota for jack mackerel. But ship owners find ways around the rules.

For instance, Unimed Glory, a subsidiary of the Greek company Laskaridis Shipping, operates three trawlers in the South Pacific. They are owned in Greece, an EU member. But, flagged in the Pacific island of Vanuatu, they operate outside Brussels’ control and can catch more jack mackerel than a share of the EU quota would allow.

Per Pevik, Unimed Glory’s Norwegian manager, told ICIJ that since Vanuatu does not meet EU sanitary standards his fish cannot be sold in Europe. Instead he sells jack mackerel to Africa. Asked if European authorities objected to his Vanuatu flags, he said, “No, they don’t bother me about that.”

Transshipment at sea also thwarts effective control. Once fish is unloaded onto long-range refrigerated vessels, its origin can be obscured.

In the southern Pacific, industrial fleets find fewer and fewer jack mackerel after years of aggressive fishing: European Union-flagged vessels collectively caught more than 111,000 metric tons of jack mackerel in 2009; the next year, the ships hauled in 40 percent fewer fish; by last year, vessels reported just 2,261 tons.

Looking back, PFA’s van Balsfoort said jack mackerel numbers go up and down in natural cycles, and vessels fished too hard at a time when they were vulnerable. “There was way too big an effort in too short a time … the entire fleet has to be blamed for it,” he said, including PFA.

Inside PacAndes

PacAndes is the proverbial puzzle within an enigma. Its 50,000 gross ton flagship, the Lafayette, is registered to Investment Company Kredo in Moscow and flies a Russian flag. Kredo — via four other subsidiaries — belongs to China Fishery Group in Singapore, which, in turn, is registered in the Cayman Islands.

China Fishery and Pacific Andes Resources Development belong to Pacific Andes International Holdings, based in Hong Kong but under yet another holding company registered in Bermuda.

PacAndes, which is publicly traded on the Hong Kong stock exchange, reports more than 100 subsidiaries under its various branches, but a partly impenetrable global network includes many more affiliates.

One of its major investors is the U.S.-based Carlyle Group, which purchased $150 million in shares in 2010.

China Fishery Group reported a 2011 revenue gain of 27.2 percent to $685.5 million from $538.9 million, 55 percent of PacAndes’ earnings. The company attributed it to stronger operations from the South Pacific fleet and the Peruvian fishmeal operations.

Ng Joo Siang, 52, a jovial Louisiana State University graduate who is hooked on golf, runs PacAndes like the family business it is despite its public listing.

His Malaysian Chinese father moved the family to Hong Kong and started a seafood business in 1986. When the executive board meets in its no-frills conference room overlooking the harbor, his portrait gazes down at his widow, who is chairwoman, his three sons and a daughter.

“My father told me the oceans were limitless,” Ng said in an interview, “but that was a false signal. We don’t want to damage the resources, to be blamed for damage. I don’t think our shareholders would like it. I don’t think our children would like it very much.”

But he ruefully acknowledges that PacAndes faces a serious public relations challenge. In 2002, a company affiliated with PacAndes was accused of illegal fishing in the Antarctic. Ng denies any wrongdoing or connection with the suspect boats, but his critics are harsh.

Back then, New Zealand diplomats told ICIJ, a Russian lawyer working for the company allegedly threatened an Auckland fisheries executive by showing him pictures of his family.

Asked to comment, Ng said that did not happen, and he dismissed it as yet another smear by people who resent PacAndes’ success.

Bent on forging a better image, Ng hired a new corporate social responsibility officer and says he wants to put scientists aboard his ships to help protect fish stocks.

But he snorted when asked about the SPRFMO recommended limit of 520,000 metric tons for jack mackerel. “Based on what, on this?” he replied, thrusting a moistened finger into the air as if checking the wind.

“There is no science,” he said. “The SPRFMO has no science. How much money has Vanuatu or Chile or whoever put in to understand about fisheries?”

Chile, in fact, spent $10.5 million in 2011 on Ifop, its highly regarded scientific institute — one-fourth of its fisheries budget. In the intrigues of fish politics, PacAndes sides with Peru, where it operates 32 vessels and has a share of the anchoveta quota, another species used for fishmeal.

Ng says the Lafayette flies a Russian flag because it perfected an old Soviet idea: a mother ship that stays put, sucking in fish to process from a fleet of catcher vessels.

Industry experts suspect another reason is the opaque manner in which official Russian business is done.

The Lafayette cannot fish, Ng said, but can pair trawl: hold one end of a net attached to another ship, which hauls in the catch. A French inspection in Tahiti in January 2010 found no fishing equipment on board.

This point is at the heart of fresh controversy within the fledgling SPRFMO.

The organization now sets new voluntary quotas based on the 2010 catch. But in that year both Russia and Peru claimed what seem clearly to be the same 40,000 metric tons.

The Russians say the Lafayette was fishing, and it flies their flag. The Peruvians say the trawlers that actually caught the fish were under their colors.

Power Plays in Chile

The jack mackerel crisis has hit hardest in Chile, where industry leaders and authorities admit to serious excesses during the unregulated years in what they call “the Olympic race.”

In 1995 alone, Chileans fished more than four million tons. That is eight times the amount SPRFMO scientists said could be landed in a sustainable way in 2012. From 2000 to 2010, Chile landed 72 percent of all jack mackerel in the southern Pacific.

Juan Vilches is a patrón de pesca, whose job is to scout fish for a large company. He is also a marine biologist. Vilches shudders when recalling the old days.

“The slaughter was tremendous, unbelievable,” he said. He used the Spanish word for massacre, matanza, similar to the Italian, mattanza, used to depict the bluefin tuna plunder.

“No one had any idea of limits,” he said. “Hundreds of tons were thrown overboard if nets came up too full for the hold. Boats came in so loaded that fish were squashed, their blood so hot it actually boiled.”

It is different now. Yet ICIJ, with the Chilean investigative center CIPER, traced how eight groups with a near monopoly have pressured the government to set quotas above scientific advice. Six of these groups are controlled by powerful families. And, together, the eight of them own rights to 87 percent of Chile's jack mackerel catch.

Roberto Angelini, 63, rules the north. He is known as “The Heir,” succeeding his uncle, Anacleto, who Forbes ranked as tied for South America’s richest man in 2007, the year he died.

Anacleto came from Italy in 1948. In 1976, he added fishing to an empire that today includes Chile’s largest fuel company, mines, forests, and other interests. Angelini’s two fishing companies have 29.3 percent of the jack mackerel quota set by the Chilean government.

They supply 5.5 percent of the world’s fishmeal.

About 70 percent of jack mackerel caught from 1998 to 2011 in Angelini’s northern fiefdom were under minimum size, a government report shows. According to the law, half of those catches would be illegal. But government officials say catches in the north fall under a special “research” category and are exempt from size regulations . Angelini declined to comment for this story.

At the University of Concepción, marine biologist Eduardo Tarifeño’s gentle tone hardens on the subject of ocean plunder.

Chile now has only sardines in relative abundance, he said. “We have no more jack mackerel or hake or anchoveta. Fisheries that produced a million or more tons a year have simply run out from overfishing by big companies.”

Tarifeño is one of only two scientists on the CNP, Chile’s national fisheries council, set up to advise on quotas. It votes by majority, and 60 percent of its members are from the industry.

Each year, Ifop, the official research institute, recommends a quota to Subpesca, the Economy Ministry’s fisheries unit, which then proposes its own figure. If the CNP rejects that, the new limit is 80 percent of the previous year’s quota.

As jack mackerel stocks plummet, government officials and industry executives each blame the other for not taking earlier, firm action to reduce quotas.

A new fisheries bill expected to pass this year gives this CNP role to a handpicked panel of experts. But Tarifeño insists it is now too late for anything short of drastic action.

He told ICIJ: “If we don’t save jack mackerel today we won’t be able to do it later. We need a total ban for at least five years.”

At the fisheries secretariat in Valparaiso, Italo Campodónico reflected on that. “As a marine biologist, I have to agree,” he said. “We should have a five-year ban. But as a civil servant, I must be realistic. For economic and social reasons, it won’t happen. Outsiders can go fish in other waters. We can’t.”

Peru’s 'Vanished' Anchoveta

Peru is the world’s second largest fishing nation after China. The ramshackle port of Chimbote – the country's biggest – lands more fish than the entire Spanish fleet catches in a year.

You smell Chimbote long before you see it. Reeking oily dark smoke billows from a forest of chimneys. Artisan boats bob in every direction around the battered wharves.

Nationally imposed rules define what is supposed to happen when vessels tie up with fish. But when asked when they last saw inspectors, a pair of aging fishermen looked at each other and laughed.

ICIJ, with the investigative reporting group IDL-Reporteros in Lima, obtained records from the official database of catches, which shows the extent of fraud shielded behind factory gates.

An analysis of more than 100,000 weighing records from 2009 to the first half of 2011 found that most of Peru’s fishmeal companies systematically cheated on half of the landings— in some cases, underreporting catches by 50 percent.

This fraud allows companies to catch more fish than quotas allow, to save on taxes and per-ton levies, and to pay less to fishermen who earn a percentage of the catch.

In all, at least 630,000 metric tons of anchoveta — worth nearly $200 million in fishmeal — “vanished” in the weighing process over two and a half years. They simply weren’t counted. Top offenders are Peruvian, but the ranking also includes PacAndes’ China Fishery Group and three companies with Norwegian investment.

Peru’s deputy fisheries minister Jaime Reyes Miranda acknowledged in an interview with ICIJ that there are “serious problems” with scales at fishmeal plants and said the government is trying to find a solution to make sure anchoveta numbers are not manipulated.

Richard Inurritegui, president of the National Fisheries Society, the leading industry group, downplayed the investigation’s findings and blamed the masters’ visual estimates for the discrepancies between fish declared by vessels and fish weighed in the plants. China Fishery Group refused to comment despite numerous requests.

Patricia Majluf, vice president of Imarpe, Peru’s highly regarded oceans institute, described what she says are countless ways for fishermen and fishmeal plants to cheat on weight, evade taxes, cut corners and break rules.

If caught, she said, companies are able to delay penalties for four years and end up paying a fraction of fines levied.

Despite its solid reputation, the recommendations of Imarpe for a monitored decrease in fishing continue to get ignored.

Saving Fish or Industry?

Roberto Cesari, chief EU envoy to SPFRMO, which meets next week, told ICIJ he expects ratification only in 2013. This would be after seven years of precipitous decline for jack mackerel.

Cesari said the EU tries to exert pressure to reach a needed consensus or resolve conflict, but its clout is limited.

“We have been expressing our disappointment officially to China, Russia,” he said, “but as you understand these are not minor players in the world … they are giants.”

Bill Mansfield, a New Zealand international lawyer who has chaired SPRFMO since 2006, said that voluntary restraints have not protected fish stocks, and it is time to put the convention into force.

He said the Santiago meeting must limit the 2012 catch to 390,000 metric tons or less.

“The reality is that everybody needs to take a deep step of restraint if this species is to come back,” he told ICIJ, declining to name any country that balked at sharp reductions.

While public officials avoid pointing fingers, two eccentric ex-sailors who pore over computers on tiny islands at opposite extremes of the world — neither knows the other — excoriate the big subsidized fleets.

Gunnar Album, near Bodø above the Arctic Circle in Norway, directs his TM Foundation and now consults for The Pew Charitable Trusts*.

Between feeding his chickens and the llama he keeps to scare off foxes, he uses satellite data to track fishing vessels. He travels often to international meetings and distant ports.

Album says government support has created so much capacity that super trawlers must fish to their maximum for return on investment.

“These vessels roam the oceans for any available fish, causing overfishing and unbearable pressure on governments trying to manage resources,” he said.

Martini Gotje, a Dutch expatriate who crewed aboard the Greenpeace Rainbow Warrior when French agents sank it in New Zealand’s Auckland harbor in 1985, does much the same from the idyllic island of Waiheke, near Auckland.

The first priority, he said, should be saving fish, not the fishing industry. “The Lafayette raised the game to an incredible level, and Holland is very much involved,” he said. “There are way too many boats, just simply way too many boats.”

In the end, oceanographer Pauly argues, this global trend will not change unless a major power — the European Union or the United States — takes firm action. “Somebody has to take the high ground,” he said, “and others will follow.”

Duncan Currie, a New Zealand-based environment lawyer with the Deep Seas Conservation Coalition, sees jack mackerel as a clear case in point. They school in a well-defined range and relatively few fleets pursue them.

“You have to ask the obvious question,” he concludes. “If we can’t save this, what can we save?”